May 2017

Chatbots, the virtual assistants of the banking future…and not only

There are more than 600 of them throughout the world – chatbots, or virtual assistants that is. Their task is to greet customers, answer basic questions, and propose products and services after identifying the needs of customers.

Almost 10 years ago, when the first bots were being built for pioneering customers, it was Avatar, Virtual Assistant, Virtual Consultant that were keeping people awake at night… Basically, anything but chatbots, which were then associated with automatic chats created using the garage method. Today, however, bots for business are hot.

This is all because of Facebook or Google, which place emphasis on high user loyalty. Virtual assistants have turned out to be very important for these processes. Why? The way we use information and make on-line services and purchases is changing. The growing movement is supported not only by static websites, but also advanced services and mobile applications. In chatbots, it’s about the next step, or monetizing the “hanging out” – converting to purchases, making reservations, registration – all without leaving the application. Users sit on social networks and can perform transactions without leaving home. Virtual advisors on these chats simply ask questions, a bit like a seller in a traditional store, filling out the form for the user, indicating his or her preferred choice.

In 2016, Chris Messina drew attention to the changes taking place within the conversational commerce (ConvComm) area. Facebook opening a Bot Store and renaming Messenger as a platform further confirmed his words. The bot that talks to us via Messenger is an interesting example, as it will select a daily news subscription and display articles that interest us. It is amazing how precisely this bot can select a portion of information based on a profile. This is a great convenience in an era when we are flooded with information and do not always manage to get to the content we actually want.

The same change in consumer behavior is clearly noticeable in almost every sector of the economy where customer service plays a key role in the sales of services.

Bot as a BOK bank employee

How can banks use bots to build relationships with consumers? Virtual banking has led to a real revolution in the use of banking services. Millions of people have been convinced that they do not need to visit bank branches on an everyday basis to take advantage of the full range of financial services. Services like opening an account, making an investment or even taking a loan are already widely available on the Internet. Remote customer service has been firing up the imagination of bankers for years, and bank hotlines using chat are no surprise to anyone anymore. So where is the right place for the bot?

To get the full picture, let us imagine a specific situation: the customer on chat (e.g. Messenger) asks the bot how much he spent over given period, for example last weekend, and gets the entire amount in the blink of an eye. Then, he asks for further details about specific transactions:

– What was the bill at restaurant X?
– 250 zł
– Transfer 250 zł to Marta
– Which Marta? Kowalska or Nowak?
– Nowak
– To summarize: I am to transfer Marta Nowak 250 zł, right?
– Yes
– Transfer sent.

This sounds like science fiction, but such a solution is already technically feasible to implement. The Bank of America already uses a similar method of communication (via bot) – Eric BofA. And more and more people are interested!

Talk with the chatbot

A chatbot, also known as a virtual agent or automated assistant, is a computer application whose task is to conduct interviews with people, answer questions, give advice and collect data that can help it solve the problem reported by the user. This is a conversational interface that understands human speech and issued commands. With its help, writing on the chat or dictating content, you can make a transfer, check your spending in different categories, open an account, make in investment or even cancel a credit card instantaneously. It is also very proactive, reminding about payment dates, informing about exceeding the monthly budget as well as about financial products that meet the needs of the user. A well-designed and implemented conversational interface allows you to manage finances from different banks. This is possible thanks to the 2015 PSD2 EU Directive which requires banks to introduce an open API for third parties.

A bot can also integrate with external systems, such as e-commerce systems, to allow for immediate payment, or with price comparison sites.

Chatbots from MasterCard

In 21016, Mastercard, an organization encompassing more than 25,000 financial institutions issuing credit cards known to all, offered to banks and partners chatbots that allow them to communicate with customers using chat rooms and instant messaging. Thanks to them, consumers will be able to perform transactions, manage their finances and make purchases without leaving home. At the moment, this is a pilot project which the company will realize in the United States. Ultimately, the service is to be introduced in other countries as well.

In a press release, MasterCard referenced research done by the Gartner agency, which shows that by the end of the year, nearly 2 billion online sales transactions will be carried out with the help of mobile, automated assistants that use artificial intelligence. The company is developing bots that will allow a real dialogue to be conducted with the client, provide personalized and problem-free service, and will be able to offer products and services suitable to the context, including bonuses.

MasterCard’s bots for banks are able to convey basic information and answer the most common customer questions, just like customer service staff. The aim is to provide a personalized service, and occasionally offer discounts or other bonuses. The company announced that due to bots, consumers will be able to perform transactions, manage their finances and do shopping. It will be possible to ask them, for example, about account balance or purchase history and “get help” in the field of financial knowledge. Clients will contact them using Facebook Messenger and text messages. Financial institutions therefore gain a whole new customer service model, which will be as easy and natural as sending a text.

Solutions based on chatbots can also be used in online shops, insurance, healthcare, telecoms, the travel industry and many others (wherever assistance and access to information are key).

These examples form the basis for a new way of thinking about ConvComm – the new approach to handling bulk transactions in banks, insurance, and shopping, where the behaviors of sellers or representatives are mapped to the algorithms, and the bots simply reproduce these employee behaviors and tasks. Is this an ideal solution? The assumption that they can replace some components of applications, especially those responsible for customer service, is a safer assumption. They are definitely one of the most tangible effects of the popularization of AI algorithms in the eCommerce and Customer Service worlds, and experts say that artificial intelligence will change them beyond recognition, as we will discuss in the next post.

Any questions?

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Piotr Skrabski

Piotr Skrabski

General Manager

    Ailleron Company

    43B Jana Pawła II Avenue
    Podium Park II Building
    31-864 Cracow

    Did you know?

    A virtual branch will work perfectly wherever efficient service is crucial